September household spending dropped 1.9 percent on the year after sinking 4.1 percent in August. The decline was led by a continued sharp drop in spending on automobiles and a pullback in spending on TVs. Many households had already bought new digital TVs ahead of July 24, when Japan terminated analogue broadcasting services. Transportation & communication spending slid 11.0 percent while fuel, light & water charges dropped 10.0 percent on the year. Spending on clothing & footwear dropped 5.0 percent. On the plus side, housing was up 9.9 percent and spending on furniture & household supplies was up 6.5 percent. Medical spending was up 2.3 percent.

European leaders finally thrashed out a comprehensive response to their sovereign debt and banking crisis which culminated in a detailed communiqué released this morning in Brussels. This is a summary of the key features of this document together with our assessment of its effectiveness:

September consumer price index was unchanged on the month and edged up 0.2 percent on the year. This was the third consecutive annual increase mainly due to higher gasoline and utility prices. The core CPI which excludes fresh food was also unchanged on the month and up 0.2 percent on the year. Excluding both food & energy however, the CPI was unchanged on the month and down 0.4 percent on the year. Goods prices were up 0.4 percent on the month but down 0.4 percent on the year while services slid 0.3 percent but were up 0.4 percent on the year.

On the year, food prices were down 0.8 percent while furniture & household utensils slid 6.0 percent. Medical care costs were down 0.7 percent. However, transportation & communication prices were up 1.6 percent on the year.

September unemployment rate slipped to 4.1 percent from 4.3 percent in August as the number of employed increased from the previous month. The unemployment rate is the lowest since November 2008 when it was 4.0 percent. Effective with September data, the government released the national average unemployment rate based on figures from all the 47 prefectures, including earthquake hit areas that were previously excluded from the data. The adjusted number of unemployed was down by 30,000 to 2.67 million for the second consecutive monthly drop. The unadjusted number of employed people fell by 330,000 to 62.76 million on the year.